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What happens when the term of a commercial tenancy expires?

If you own a consulting business in Naples located in a small commercial building where you are one of four or more tenants, you are not alone. It is not uncommon for such business to have a quarter-to-quarter lease.

When this lease expires, if you have not vacated the property, you become a holdover tenant. How does this occur and what happens now?

Feeling the uncertainty

There are various reasons for a holdover tenancy or tenancy at sufferance as it is sometimes called. In this case, the landlord may be trying to sell the building in which you work and there is interest from a prospective buyer. This brings up a few uncertainties: Would a new owner raise your rent? Would there be a complete building overhaul? Would you and the other tenants have to leave? Because of the uncertainty you are facing, you may decide to remain on the property as a renter for the time being and hope the owner will find this to be a satisfactory arrangement.

Accepting rent

As a holdover tenant, you might prepare to continue making rent payments to the building owner. If the owner accepts, you can remain on the property legally and the acceptance might restart your lease. If not, the owner could consider you a trespasser and demand that you move out. In any event, you must comply with the terms of the lease that existed prior to its expiration.

Refusing to leave

Keep in mind that if you refuse to vacate the premises once your tenant agreement has expired, the building owner, the landlord's attorney or an agent can issue a demand that you pay double the rent for as long as you remain.

Solving the dilemma

One way to solve the issue of a holdover tenancy is to include wording in the original landlord-tenant agreement that explains what will happen when the agreement ends. For example, there might be a clause that changes your quarter-by-quarter payment schedule to month-to-month. A well-crafted contract is essential so that the parties to the agreement clearly understand what to expect going forward.

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